T.C. Memo. 1997-428
UNITED STATES TAX COURT
JENNIFER A. LESTRANGE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19567-95. Filed September 22, 1997.
Gerald A. Holmes, for petitioner.
Bryan E. Sladek, for respondent.
MEMORANDUM OPINION
PAJAK, Special Trial Judge: This case was heard pursuant to
section 7443A(b)(3) of the Code, and Rules 180, 181, and 182.
All section references are to the Internal Revenue Code in effect
for the taxable year in issue. All Rule references are to the
Tax Court Rules of Practice and Procedure.
Respondent determined a deficiency in petitioner's 1994
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Federal income tax in the amount of $1,479. The Court must
decide whether petitioner is entitled to an earned income credit
in the amount of $1,479 for the taxable year in issue.
This case was submitted fully stipulated pursuant to Rule
122. The stipulated facts are so found. Petitioner resided in
Santa Rosa, California, when her petition was filed.
Petitioner has a son, Treymaine D. Wilkins (Treymaine).
Treymaine was approximately 2½ years old at the end of 1994.
With the exception of September 1994, from March 1, 1994, through
December 31, 1994, petitioner and Treymaine resided with Charlene
Groom, petitioner's mother and Treymaine's grandmother
(grandmother) at 3 different residences in California. The
grandmother rented the 3 residences. Petitioner paid one-half of
the rent and utilities for the exclusive use of a bedroom and
shared use of the common areas. Petitioner paid for food for
Treymaine and herself. Apparently, Heather Lestrange (Heather),
the grandmother's other daughter and petitioner's sister, also
lived in the residences.
Petitioner was employed by the Target Division of Dayton
Hudson Corporation. She earned $5,626.40 and reported a rounded-
off amount of $5,626 on her 1994 return. The grandmother's
adjusted gross income was greater than petitioner's adjusted
gross income in 1994.
On her 1994 Federal income tax return, petitioner claimed an
earned income credit. She identified Treymaine as her
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"qualifying child" within the meaning of section 32(c)(3).
On her 1994 Federal income tax return, the grandmother
claimed an earned income credit. The grandmother identified her
daughter Heather as her qualifying child on her 1994 return.
Respondent determined that petitioner was not entitled to an
earned income credit for 1994. Petitioner bears the burden to
prove that respondent's determination is incorrect. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
Section 32(a) provides for an earned income credit in the
case of an "eligible individual". Section 32(c)(1)(A) provides
that an "eligible individual" means any individual who has a
"qualifying child" for the taxable year. Section 32(c)(3)
defines qualifying child in pertinent part as follows:
(3) QUALIFYING CHILD.--
(A) IN GENERAL.--The term "qualifying child" means,
with respect to any taxpayer for any taxable year, an
individual--
(i) who bears a relationship to the taxpayer
described in subparagraph (B),
(ii) * * * who has the same principal place of
abode as the taxpayer for more than one-half of such
taxable year,
(iii) who meets the age requirements of
subparagraph (C), and
(iv) with respect to whom the taxpayer meets the
identification requirements of subparagraph (D).
Respondent on brief admits that section 32 consists of four
elements. The parties agree that Treymaine has satisfied these
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four elements of section 32(c)(3)(A) with respect to petitioner.
However, respondent contends that section 32(c)(1)(C) precludes
petitioner from being an eligible individual with respect to
Treymaine for the year in issue.
Section 32(c)(1)(C) provides:
If 2 or more individuals would (but for this
subparagraph and after application of subparagraph (B))
be treated as eligible individuals with respect to the
same qualifying child for taxable years beginning in
the same calendar year, only the individual with the
highest adjusted gross income for such taxable years
shall be treated as an eligible individual with respect
to such qualifying child.
Respondent argues that Treymaine was a qualifying child with
respect to both petitioner and the grandmother for 1994.
Therefore, respondent contends that because the grandmother had
the higher adjusted gross income in 1994, section 32(c)(1)(C)
precludes petitioner from being an eligible individual with
respect to Treymaine for that year.
Petitioner observes that because the grandmother did not
identify Treymaine on her 1994 Federal income tax return as her
qualifying child, all four of the requirements of section
32(c)(3)(A) were not met by the grandmother. Consequently,
Treymaine is not a qualifying child with respect to the
grandmother. Thus, section 32(c)(1)(C) does not apply because
petitioner and the grandmother are not eligible individuals with
respect to the same qualifying child.
Respondent refers to the legislative history of the Omnibus
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Budget Reconciliation Act of 1990, Pub. L. 101-508, sec.
11111(a), 104 Stat. 1388, 1388-408 (the act that enacted the
"qualifying child" test). Respondent then contends that if a
child satisfies the relationship, abode, and age requirements
found in section 32(c)(3)(A)(i), (ii), and (iii), the child is a
qualifying child. Respondent claims the identification
requirement found in section 32(c)(3)(A)(iv) is merely a
requirement to report the name, age, and Taxpayer Identification
Number of an individual who is otherwise a qualifying child. On
brief, respondent argues that Congress imposed the identification
requirement simply to ease administration of the law and reduce
respondent's administrative burden. See H. Conf. Rept. 101-964,
at 1037 (1990), 1991-2 C.B. 560, 564. Yet, the legislative
history cited above shows that there are four requirements to
meet the definition of a qualifying child. In fact, respondent
so admits on brief.
The starting point for interpreting a statute is the
language of the statute itself. Consumer Product Safety Comm'n
v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). If the language
of the statute is plain, clear, and unambiguous, "'the sole
function of the courts is to enforce it according to its terms.'"
United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241
(1989) (quoting Caminetti v. United States, 242 U.S. 470, 485
(1917)). Thus, as long as the statutory language is clear and
unambiguous, there generally is no need for courts to inquire
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beyond the plain language of the statute. Absent absurd,
unreasonable, or futile results, there is "no more persuasive
evidence of the purpose of a statute than the words by which the
legislature undertook to give expression to its wishes." United
States v. American Trucking Associations, 310 U.S. 534, 543
(1940).
Section 32(c)(1)(A) defines an eligible individual as an
individual who has a qualifying child for the taxable year. A
qualifying child is an individual who satisfies a relationship
test, an abode test, an age test, and for whom the taxpayer
satisfies an identification requirement. Sec. 32(c)(3)(A)(i)-
(iv). These requirements are conjunctive.
For the year in issue, Treymaine met the requirements of
section 32(c)(3)(A)(i), (ii), (iii), and (iv) with respect to
petitioner. With respect to his grandmother, Treymaine only met
the requirements of section 32(c)(3)(A)(i), (ii), and (iii).
What is significant here is that the grandmother did not identify
Treymaine as her qualifying child on her 1994 Federal income tax
return and thus failed to satisfy the requirement of section
32(c)(3)(A)(iv). Accordingly, Treymaine is not a qualifying
child with respect to his grandmother.
Because petitioner and the grandmother are not eligible
individuals with respect to the same qualifying child, section
32(c)(1)(C) does not preclude petitioner from entitlement to an
earned income credit for 1994. We cannot say that this
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conclusion is "so bizarre that Congress could not have intended
it." Demarest v. Manspeaker, 498 U.S. 184, 191 (1991). The
language of section 32(c)(3)(A) is sufficiently clear to be
dispositive of the issue at hand. "[W]hen a statute speaks with
clarity to an issue judicial inquiry into the statute's meaning,
in all but the most extraordinary circumstance, is finished."
Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475
(1992).
The parties agreed that petitioner would be entitled to a
refund of $1,499 if decision were entered in her favor in this
case.
Decision will be entered
for petitioner.